Schenectady's overassessments highest New York's upstate region

Data shows 21 percent difference in assessed and market valuations

Published 10:03 pm, Friday, July 10, 2015

A For Sale sign is posted outside a homeon Morris Street Tuesday morning, July 7, 2015, in Schenectady, N.Y. Schenectady has the second- most inflated property assessments in Upstate New York compared with actual market values. (Skip Dickstein/Times Union) less

A For Sale sign is posted outside a homeon Morris Street Tuesday morning, July 7, 2015, in Schenectady, N.Y. Schenectady has the second- most inflated property assessments in Upstate New York compared with ... more

A For Sale sign is posted outside a home on Morris Street Tuesday morning, July 7, 2015, in Schenectady, N.Y. Schenectady has the second- most inflated property assessments in Upstate New York compared with actual market values. (Skip Dickstein/Times Union) less

A For Sale sign is posted outside a home on Morris Street Tuesday morning, July 7, 2015, in Schenectady, N.Y. Schenectady has the second- most inflated property assessments in Upstate New York compared with ... more

A For Sale sign is posted outside a homeon Morris Street Tuesday morning, July 7, 2015, in Schenectady, N.Y. Schenectady has the second- most inflated property assessments in Upstate New York compared with actual market values. (Skip Dickstein/Times Union) less

A For Sale sign is posted outside a homeon Morris Street Tuesday morning, July 7, 2015, in Schenectady, N.Y. Schenectady has the second- most inflated property assessments in Upstate New York compared with ... more

Property assessments in the City of Schenectady are some of the most inflated — when compared to market values — of any city or town north of New York City, according to a review of data from the state Department of Taxation and Finance.

Schenectady properties are currently assessed 21 percent higher than they're actually worth — one of only a small group of other municipalities in upstate New York that have overassessed properties. The town of Plainfield, Otsego County, is the only other municipality with as high a disparity, at slightly more than 21 percent. Schenectady is the only city on the short list.

The Times Union did not include New York City or Nassau County in its analysis because they use different assessment systems.

Such a difference in assessment versus market value can be of little consequence if all property owners are assessed the same way. Assessments are what property tax bills are based on. But as more Schenectady homeowners and businesses are legally challenging the city and getting their assessments lowered, it could push the tax burden onto others whose assessments continue to remain at higher levels.

"If they haven't been granted relief, they're paying too much," said City Councilman Vincent Riggi, the lone non-Democrat on the council who said he has requested the city do a reassessment to adjust values.

More Information

Property assessment changes

2008-2009

Schenectady +5.8%

Other cities* -.5%

2009-2010

Schenectady +9%

Other cities -2.1%

2010-2011

Schenectady -.3%

Other cities -6.5%

2011-2012

Schenectady -1%

Other cities -3.8%

*Average of other New York state cities, except New York City Source: New York state Comptroller's Office

New York's highest upstate equalization rates*

Schenectady County

Schenectady 121

Otsego County

Plainfield 121.34

Otego 118.12

Butternuts 114.50

New Lisbon 114.60

Cherry Valley 113.18

Maryland 112.50

Columbia County

Taghkanic 112.25

Ulster County

Wawarsing 110.68

*Does not include NYC or Nassau County

Source: New York state Department of Taxation and Finance

The 21 percent for Schenectady is taken from the state's equalization rate system. Equalization rates are used to equitably bill school taxes in districts that include municipalities with different assessment systems. Many governments still have partial assessments, meaning they bill taxes based on only a portion of a property's value. But in rare cases, like in Schenectady, assessments are above 100 percent market value. So for 2015, the tentative equalization rate for Schenectady is 121 percent. The equalization rates will be finalized later this summer.

Mayor Gary McCarthy said he does not want to do a reassessment until the Rivers Casino and Resort is added to the tax rolls in 2017. The casino, plus the proposed Mohawk Harbor development that will include apartments, townhomes and retail space, would add another $480 million in construction to the city's total assessed valuation and could affect other neighboring property values.

He also said that assessment reductions happening as a result of legal challenges represent less than one percent of the roll, so taxes are still being evenly distributed among the city's estimated 20,500 properties. The city settled 89 assessment cases in 2014, not including property owners who get their assessments reduced at the regular grievance day each year.

Many of the municipalities statewide with bloated assessments have them because they did reassessments during the height of the real estate market. The City of Albany did its reassessment in 2008, and is looking to do another possibly next year to correct assessments that are 5 percent over market value.

Schenectady did its reassessment in 2009. But the state said the disparity didn't drastically widen until 2013, when the difference from market value went from 8 percent to 23 percent in 2014. The number has since improved by 2 percent this year.

McCarthy, a Democrat, said he believes his homeownership program, which involves selling city-owned distressed homes through the regular real estate market, dragged down home values between 2013 and 2014. The Greater Capital Association of Realtors said median home prices in Schenectady declined 9 percent from $99,105 to $90,050 in that year, compared with steady home prices in Albany and a slight increase in home values in Troy.

But a look back at a 2012 state Comptroller's audit of the City of Schenectady shows the city was increasing its property assessments seven years ago while other New York cities were decreasing their assessments.

Schenectady increased its assessments 13.5 percent between 2008 and 2012 — while all other cities statewide decreased their assessments on average by 12.9 percent. A higher overall assessment roll doesn't increase the amount of money a city can raise in taxes. It does lower the actual tax rate that's applied per $1,000 of assessed valuation.

When grievance day arrived after the reassessment in May 2009, hundreds lined up to dispute the new numbers, which were increased from partial to full assessment. Former Schenectady Assessor Patrick Mastro, who oversaw the reassessment, said recently the city was on par with market value until 2011 when he left the position. "They can't point the finger at me," Mastro said about the city's high equalization rate. McCarthy became interim mayor in April 2011 when Brian U. Stratton left to become head of the state canal system. McCarthy was then elected to a four-year term in 2011.

The city assessor's office has been in flux since Mastro left, with its third assessor in the role within the last four years.

Former Union College president Roger Hull, who is now running against McCarthy for the second time, said the city should do a reassessment immediately.

"There is almost no home I go to where people are not complaining about their taxes," said Hull, who created his own political group called the Alliance Party and is endorsed by city Republicans for the 2015 election. "And those taxes are based on assessments that are out of whack."